Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

Tag Archives: Austrian School

This article appeared online at TheNewAmerican.com on Thursday, April 12, 2018:

Unemployment claims fell last week to just 233,000, far below the historical average, cementing into place the longest streak below 300,000 jobless claims since 1967. A proxy for layoffs, those claims reflect not only an increasing reluctance on the part of employers to let their workers go, but an increasing need for them to bring more workers on in the face of an economic tsunami that’s just now starting to roll into the American economy.

This is just one of many indicators reflecting a growing economy, including an unemployment rate at 4.1 percent, the lowest level since 2000 (and expected to move much lower in the coming months) and employers adding to their payrolls for 90 straight months — the longest economic expansion in history.

Keynesian economists consider that consumers drive the economy, using their pay raises to drive spending on consumer goods and services. Common sense economics — aka Austrian School economics — claims that is putting the cart before the horse: It is capital investment that drives the economy, providing goods and services that consumers discover that they need and want and are willing to pay for.

After paying the world’s largest tax bill – $38 billion – Apple, Inc., the world’s largest company by market capitalization and now the government’s largest taxpayer, will have $214 billion left over.

It is making plans for that $214 billion. In its announcement on Wednesday, the company said it would be making “a new set of investments to build on its commitment to support the American economy and its workforce, concentrated in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fueling the fast-growing app economy that Apple created with iPhone® and the App Store®.”

It added:

Apple is already responsible for creating and supporting over 2 million jobs across the United States, and expects to generate even more jobs as a result of the initiatives being announced today.

The numbers are almost incomprehensibly large. Apple generates worldwide revenues of $230 billion, making profits of nearly $50 billion. It employs 124,000 people worldwide, 84,000 of them in the U.S. It has independent contractual arrangements with another 1.6 app designers, to whom it paid $5 billion last year. It operates 500 retail stores worldwide.

This article was published by The McAlvany Intelligence Advisor on Friday, January 19, 2018:

After paying the world’s largest tax bill – $38 billion – Apple, Inc., the world’s largest company by market capitalization and now the government’s largest taxpayer, will have $214 billion left over.

It is making plans for that $214 billion. In its announcement on Wednesday, the company said it would be making “a new set of investments to build on its commitment to support the American economy and its workforce, concentrated in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fueling the fast-growing app economy that Apple created with iPhone® and the App Store®.”

If Donald Trump is looking for someone to present his economic plan to the public in non-threatening terms, someone who is amiable, popular, and ideology-free, he could do worse than picking Larry Kudlow (shown). Kudlow has been affiliated with CNBC for 15 years, most notably for hosting “The Kudlow Report,” and before that, “Kudlow and Cramer.”

According to Trump transition team advisor Stephen Moore, Kudlow will shortly be named as chairman of his Council of Economic Advisors. Kudlow fits the bill.

This article first appeared online at TheNewAmerican.com on Thursday, December 4, 2014:

Banknotes of the Swiss franc

The Swiss voted down the initiative “Save Our Swiss Gold” on Sunday, November 30, by a margin of three to one, rejecting efforts to shore up the Swiss National Bank’s (SNB) balance sheet. Switzerland, a direct democracy, entertains an average of five such referendums every year, and most of them fail. This initiative would have required the SNB to boost its gold bullion holdings from its current eight percent level to 20 percent over the next five years. It would also have required the central bank to repatriate its foreign-held gold reserves, while prohibiting it from ever selling any of those reserves in the future.

When first proposed, speculators bought the Swiss franc cheap, hoping to sell it dear if the initiative passed. Investors in gold were holding their breaths as well, noting that

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, December 4th, 2013:

For the past 25 years, Austrian school economist Mark Skousen, nephew of W. Cleon Skousen (author of The 5000 Year Leap), has been trying to get the Bureau of Economic Analysis (BEA) to count the rest of the economy that the GDP doesn’t measure. In April, the BEA will start reporting the GO

Austrian school economist Mark Skousen has labored mightily for a quarter of a century to persuade the Bureau of Economic Analysis (BEA) to publish a better measure of economic activity in the United States, and, beginning in April, the BEA will start publishing the country’s

With the price of a single Bitcoin exploding by 4000% just since January and by 400% in the last month, concerns about its legitimacy as a viable internet money that could effectively serve as an alternative to central banks’ currencies are increasing.

The Bitcoin has morphed from an internet algorithm to legitimacy beginning in August when

In gearing up for the 2014 Senate election in Tennessee, the Tennessee Alliance Tea Party & Liberty Groups announced in its newsletter last week that current Senator Lamar Alexander was ripe for extinction:

This guy is almost too good to be true. Amash’s family immigrated to America in 1956 through the sponsorship of a Christian pastor. He attended Kelloggsville Christian School and graduated from Grand Rapids Christian High School where he was class valedictorian. He graduated from U of M with two degrees, magna cum laude. He served in the Michigan state house and then ran successfully for the House of Representatives in 2010. He turned 33 last week.

His voting record has earned him a Freedom Index (FI) rating of 92 and now he’s thinking of running for the Senate

With the passing of economist and scholar James M. Buchanan, a voice of insight and understanding in a tumultuous world has been stilled.

Born in Murfreesboro, Tennessee in 1919, Buchanan built his understanding of how the world works with degrees from the University of Tennessee and the University of Chicago (the “Chicago School”). He taught at a number of universities from 1950 to 1969 after which he served as Distinguished Professor Economics at the Virginia Polytechnic Institute – Virginia Tech – where he

The ongoing fight over the “fiscal cliff” may overshadow everything else as we get closer to the new year. Sadly, compromise seems hard to come by, even though the consequences of going over the cliff — hundreds of billions of dollars of spending programs that are set to expire, along with the largest tax increase since World War II for virtually all income levels — was specifically designed to force compromise.

Disasters can give an ailing construction sector a boost, while unleashing reinvestment that actually improves stricken areas and the lives of residents. Ultimately, Americans always seem to emerge stronger and rebuild better in the wake of disaster.

Happily and predictably, my friend (I don’t know him, but I know his thinking, with which I agree) Donald Boudreaux jumped onto the article with a letter to the editor pointing out the

For many, Austrian school economics is theoretical nonsense. It’s nice to read about. It’s nice and logical. It’s common sense economics. But it really can’t apply to the real world. After all, with paper currency backed by nothing and central banks running the show, Austrian thinking is strictly theoretical.

Against the background of a severe economic crisis in the eurozone, one is surprised to find a member of the euro area that is actually showing good economic performance. This member is Estonia. In terms of so-called real gross domestic product (GDP) the average yearly rate of growth in Estonia stood at 8.4 percent in 2011 against overall eurozone performance of 1.5 percent. So far in 2012 the average yearly growth stood at 2.8 percent in Estonia versus -0.2 percent in the eurozone.

How about unemployment there?

Also note that the unemployment rate in Estonia displays a visible decline: it fell to 5.9 percent in August from 7.6 percent in January. In contrast, the unemployment rate in the eurozone climbed to lofty levels in August. After closing at 10.8 percent in January, the eurozone unemployment rate shot up to 11.4 percent in August.

One of the basic premises of Austrian economics is the “cleansing” process that must take place to

James DeLong is an Austrian School economist who lives most of the time in Red Lodge, Montana. He wrote something that upset a local Progressive who asked, condescendingly, just who he thought he was, expressing antediluvian ideas like these?

He wrote back. He taught me an awful lot about how to neutralize, in a charming, winsome way, the vitriol of his attacker. He succeeded, in my opinion, in “turning away wrath” while doing himself, and the freedom movement, a world of good.

First he answers her question: Who am I?

Judith Gregory wants to know who I am. That is easily answered: I live primarily in Washington, but since 1995 I have regularly spent time in Red Lodge, and I hope to spend more in the future. Recently, I wrote a book on current politics, and complete information about me is on the book’s website, www.specialintereststate.org.

This is a mind-altering experience, reading this article. It puts my pre-existing perceptions and prejudices into disarray. When the Chinese government committed an astounding $3.5 trillion – half of the country’s gross domestic product – to stimulate the economy in 2008, it expected great things to happen: it would put people to work, counteract the Great Recession then enveloping the US, and show just how wonderful a state-controlled economy could be.

It didn’t work. Says the Journal:

Ultimately, Beijing’s stimulus fed a false investment boom that stoked asset bubbles – then the morphine [yes! the writer actually said morphine!] wore off while the government tightened.

Officials claim the economy grew at 7.6%…between April and June…Skeptics think the real number is closer to 4%. (One London research house says 1%).

Meanwhile, industries dominated or favored by the state, such as steel or solar power [No!], are idling from overcapacity. Countless sheets of copper are reportedly stacking in warehouses, blocking doorways and exemplifying Hayek’s notion of malinvestment.

Zhang somehow escaped the state indoctrination of Keynesianism and started thinking on his own. His influence has grown so remarkably, and the economic disaster enveloping China now becoming so obvious – there are now

One reason I haven’t read [Paul Ryan’s Roadmap for America] is that it’s not a real roadmap. A roadmap is the path you plan to take. Paul Ryan’s Roadmap for America is more like the plan he’d like me to think he’s going to take. Which is not the same thing.

Paul Ryan Caricature (Photo credit: DonkeyHotey)

Russ Roberts is an economics professor at George Mason University’s Mercatus Center, which means that he is a conservative, probably an Austrian school economist, and that he has a special gift of insight. This brief article of his illustrates all of this:

[Ryan’s Roadmap is] like a car company that sends me a brochure for their new car. The car looks fantastic: 80 mpg, safer than a tank, has a twenty year warranty, parks itself, has tons of leg room in the back and trunk but it’s smaller than a normal-sized sedan. And it’s only $12,000.

This is dreamland. No, this is fantasyland. Here’s the catch: you can’t buy one:

I’ll take one, I say. Or at least I’d like to test-drive one. Sorry, says the car company. It won’t be ready until January, 2013!

But his analogy is apt. We don’t buy cars this way. But we’re sold politicians this way!

Here’s is Ryan’s sales pitch:

It’s easy to say you’re going to get government down to 20% of GDP. I’d prefer a smaller number, but that’s a start.

But when he doesn’t tell me how he’s going to do it, it’s like saying you’re going to sell me a car that doesn’t exist but when it does exist it’s going to get 200 mpg and still be a functional gasoline-powered car that seats six and not a lawn mower.

Before I order one, I’d like to know how he’s going to manage that.

When he says he has a plan to create 12 million jobs in the next four years, I really don’t feel well at all.

Don’t look too closely at the brochure, and for Heaven’s sake don’t look at the fine print. If you do, you’ll see the scam:

It’s a beautiful brochure but I’ve seen so many of those brochures before.

And they’ve always disappointed. There is no such car. And there is no such plan.

As history abundantly demonstrates, the gold standard would not immunize the economy from financial crises. Imposing it would, however, render the central bank powerless to respond to them, as it could not readily expand credit or act as lender of last resort to solvent institutions.

(Photo credit: Wikipedia)

Here is another perfect example of an uninformed individual given a bully pulpit to promote his ignorance courtesy of the Washington Post.

He refers to a part of the Republican Party’s platform (which means nothing anyway) which calls for a commission to study “possible ways to set a fixed value for the dollar.” This is an allusion to the study done back in 1980 by the Gold Commission which recommended against the concept, but was dissented to by one of its members, Ron Paul, in his “The Case for Gold.”

And this frightens author Lane:

We can only hope that this iteration of Republican pandering to the gold bugs bears no more fruit than the last one. Touted as a cure for the chronic financial instability that central banking purportedly breeds, tying the nation’s money supply to the supply of gold would be worse than the disease.

We know where he stands: “pandering to the gold bugs” is a giveaway to a polemic, not a rational discussion.

A more rational discussion of the gold standard starts with what it would do: rein in the uncontrollable urge by the Fed to bail out the big banks. The Fed, remember, is a cartel whose mission is to protect the big banks from the consequences of their bad behaviors, using taxpayer monies (or digital money created out of nothing which derives its value from depreciating the value of taxpayer monies).

If we had a commodity-based free banking system, we would not have had the boom and bust of the 2000s in the first place. The powers that enable the Fed to create liquidity ex nihilo in a crisis are the very same powers that enabled it to drive the real Federal Funds rate below zero for two years and fuel the housing bubble, which gave us the financial crisis and recession.

Just because the Washington Post has a louder voice doesn’t make it any more credible. A wrong-headed opinion about the gold standard is still wrong, no matter who promotes it, don’t you think?

Donald Boudreaux is one of my favorite economists. Not only is he of the Austrian School of economics, but he writes engagingly and persuasively as well. And when someone as dense and illiterate as Harry Reid says something that is provably stupid, count on Boudreaux to write a letter to the editor about it.

It’s not about whether the Olympic uniforms were made in China. It’s about being free to do business with the low bidder.

By the way, what else are we wearing that is already made in China? Just about everything!